TMC the Metals Company Inc. reported significant financial challenges for the three and nine months ended September 30, 2024, with a net loss of $20.5 million for the third quarter, a 65% increase from the $12.5 million loss in the same period of 2023. For the nine-month period, the net loss reached $65.9 million, up 63% from $40.3 million in the prior year. The company has not generated any revenue to date, as it remains in the exploration stage, awaiting an exploitation contract from the International Seabed Authority (ISA).

Operating expenses for the third quarter totaled $11.8 million, compared to $7.9 million in the same quarter of 2023, reflecting a 49% increase. General and administrative expenses also rose significantly, from $4.6 million in Q3 2023 to $8.1 million in Q3 2024, primarily due to increased share-based compensation, legal and consulting costs, and higher personnel expenses.

The company's financial position has deteriorated, with cash on hand dropping to $360,000 as of September 30, 2024, down from $6.8 million at the end of 2023. Total assets decreased to $61.3 million, while total liabilities surged to $82.8 million, resulting in total equity of $(21.5 million), a stark decline from $10.9 million at the end of the previous fiscal year.

Strategically, TMC has been active in securing financing, including a registered direct offering in August 2023 that raised approximately $24.9 million gross. The company also entered into various credit facilities, including a $25 million unsecured credit facility and a $5 million working capital loan from Allseas Investments. As of September 30, 2024, TMC had drawn $4.2 million from its credit facilities.

In terms of operational developments, TMC is focused on the collection and processing of polymetallic nodules in the Clarion Clipperton Zone (CCZ). The company has engaged in strategic partnerships, including a collaboration with Allseas to develop a nodule collection system and a memorandum of understanding with Pacific Metals Co Ltd for a feasibility study on processing nodules into nickel-copper-cobalt alloy and manganese silicate.

Despite these efforts, TMC faces significant risks, including the finalization of ISA regulations and the approval of its exploitation contract application. The company is also dealing with a material weakness in its internal controls over financial reporting, which has led to errors in previous financial statements. Management is implementing measures to address these weaknesses, including enhanced training and potential engagement of third-party resources.